Prediction 4: China will allow the Renminbi (yuan) to rise nearly 8% against the dollar.
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"A rise in the value of the renminbi (yuan) would be unlikely to have much, if any, effect on aggregate employment in the United States, " he added.
The yuan, or renminbi, has been appreciating around 5% to 6% against the dollar each year.
Orthodox thinking regarding yuan internationalization (the yuan is the base unit of the renminbi) revolves around the idea that if it is to occur, the yuan will become globalized through Hong Kong-based transactions.
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The yuan, as the renminbi is informally known, has fallen 0.9% against the dollar this year with most of the decline taking place in the second quarter.
The City of London is gaining an edge in the race with other global financial centers to snatch a slice of offshore trade in the yuan, also known as renminbi.
One upshot is that growing mountain of yuan deposits in Hong Kong - because all this wonderful trade in renminbi is essentially one way.
We should be wary of assuming that the offshore trade in renminbi out of Hong Kong is the first step on the road to the yuan as a major global currency, with the City taking a big piece of the action.
"The start of yuan clearing service in Singapore is one more step forward to the internationalization of the renminbi, " said Matthew Cannon, HSBC's head of global markets in Singapore, referring to the Chinese currency by its official name.
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At the same time, issuers command lower coupons on synthetic yuan bonds than dollar bonds, pocketing the difference, though they forego any gains on renminbi appreciation.
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